Zacks Bull and Bear of the Day Highlights: Michael Kors, Capital One Financial, Toyota Motor, TRW Automotive Holding and General Motors
CHICAGO, Feb. 8, 2013 /PRNewswire/ -- Zacks Equity Research highlights Michael Kors (NYSE: KORS) as the Bull of the Day and Capital One Financial (NYSE: COF) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Toyota Motor Corp. (NYSE: TM), TRW Automotive Holding Corp. (NYSE: TRW) and General Motors Company (NYSE: GM).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Looking for a fashion retailer with fresh, powerful branding and worldwide growth across multiple product lines and sales channels? Look no further than Michael Kors (NYSE: KORS), the company bearing the name of the award-winning designer of luxury clothing and accessories with over 300 retail stores worldwide.
Michael Kors sells branded women's and men's apparel and accessories, including footwear, watches, jewelry, and a full line of fragrance products. With their "accessible luxury" line, they can be found in middle-tier department stores like Macy's as well as high-end venues such as Nordstrom and Saks.
Shares of this Zacks #1 Rank (Strong Buy) have more than doubled in price since their IPO in December of 2011, riding on the success of its multi-channel strategy, unique designs and strong infrastructure. I first recommended buying KORS in the summer of 2012 around $40.
The KORS story remains the same with rising earnings estimates on the back of strong fiscal second-quarter results. In-fact this global luxury lifestyle brand has delivered positive earnings surprises in the last four quarters with an average surprise of 58.7%.
This might be the right credit card for your wallet, but the stock should be strongly re-evaluated if it's in your portfolio. Capital One Financial (NYSE: COF) slipped to a Zacks #5 Rank (Strong Sell) this week after a continued deluge of downward earnings estimate revisions.
This is happening in the aftermath of a mixed earnings report that took the stock down sharply last month from its 52-week high. The company reported fourth quarter 2012 earnings of $1.41 per share which significantly lagged the Zacks Consensus Estimate of $1.62.
This was a big improvement from the prior-year quarter's 88 cents, but investors and analysts are still looking for the bright spots. Before we look at some of the details of that report, let's take a look at the Zacks Price & Consensus chart which gives us a great visual on which way estimates are headed and if price may soon follow.
For 2012, Capital One reported earnings of $6.16 per share. This was below the Zacks Consensus Estimate of $6.43 and prior-year earnings of $6.80.
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Toyota Again Recalls a Million Cars
The recall fiasco continues to whip Toyota Motor Corp. (NYSE: TM). Recently, the automaker revealed that it would recall nearly 1.3 million cars globally for two separate defects. The first defect involves 752,000 units of Toyota Corolla and Corolla Matrix small cars from the 2003 and 2004 model years while the second one includes 385,000 Lexus IS luxury sedans and its series from the 2006 through 2012 model years.
Corolla Recall The Corolla recall is related to defective airbags due to a malfunctioned IC chip in the airbag control unit. The malfunction can cause the control unit to receive electrical interference from other parts in the car, causing the airbags to deploy when it is not required.
The airbag control unit in the vehicles has been manufactured by TRW Automotive Holding Corp. (NYSE: TRW). However, the IC chips have been supplied to TRW by a third party, according to some TRW official.
According to a Toyota official, the faulty airbag system resulted in 18 injuries in the U.S. and most probably 2 crashes outside Japan. Toyota decided to add an electrical signal filter to the airbag control module in the defective vehicles. Repairs are expected to take more than an hour.
Lexus Recall The Lexus recall is related to defective windshield wipers that may become inoperative. The wiper arm nut of the front wiper in the defective vehicles may not be sufficiently tight. As a result, the wiper may unable to work properly under certain weather conditions such as snow.
Toyota decided to exchange the nut in repairs that will take about half an hour. According to Toyota, there have been no reports of injuries or accidents related to the vehicles with defective wipers.
Since November 2009, the automaker has recalled about 20 million vehicles globally, surpassing all other automakers. A few months back, Toyota had announced a major worldwide recall of 7.43 million vehicles that included more than a dozen models manufactured between 2005 and 2010. The recall was related to faulty power window switches in the vehicles that can cause fire because they did not have grease applied properly during production.
U.S.Government Fine Last year, the Transportation Department of U.S. slapped a fine of $17.35 million on Toyota due to late response regarding a defect in its vehicles to safety regulators as well as late recall of those vehicles.
According to the department, it was the maximum allowable fine under the law for not initiating a recall in a timely manner. The latest fine adds to $48.4 million imposed by the U.S. government on the company in 2010 due to late recall of millions of defective vehicles.
Sales Crown Regained
Despite these, Toyota recaptured the sales crown from General Motors Company (NYSE: GM) by selling 9.75 million vehicles globally in 2012, which exceeded GM's sales of 9.29 million vehicles.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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